20 Jun Storms

Last week our son and his girlfriend began what turned out to be a halting and arduous trip from Salt Lake City to our home in New Hampshire.  Their first flight was delayed then cancelled as bad weather shut down the entire airport.  The airline rebooked them on a flight scheduled to leave thirty-six hours hence.

Never one to settle for a solitary option being offered, mother, Jeanette, spent over an hour on the phone with the airline securing them seats on a flight out in merely twelve hours.  Alas, just before leaving for the airport word came that another swath of bad weather had grounded that flight. The airline rescheduled their departure for another dozen or so hours into the future.

These roller coaster swings from anticipation to disappointment and back were much like the behavior of the stock market all week long.  Battered by conflicting signals from the federal reserve, economic data, and unemployment reports, the market had suffered triple-digit advances one day, only to be followed by triple-digit declines the next and so on, back and forth ending the week, much like my son and his partner, right back where it had started.

Now, son Andrew had lost nothing but time and patience.  Back on Wall Street the fortunes of traders varied.  Those who had guessed correctly went into the weekend celebrating their profits, while those who had misjudged the next day’s action were licking their wounds.  Those of us who ignored the whole business and stuck to our long term plans un-budged by the fear and greed that accompanies volatility simply loaded our kayaks off to enjoy another weekend on the Ompomponoosuc River.

Actively hopping from one stock to another in and out of the market seldom results in sustained performance advantage.  It makes for a good living for those who market their supposed expertise in the exercise through their active management of client portfolios and mutual funds.  But, investors are better served by sparing themselves the fees charged, and letting the market simply do what it is inevitably and unpredictably going to do.

That way, when the market swoons they, like son Andrew, will at least retain their ticket for the next flight up.